The government is always happy when some foreign credit agency gives it a push. What it is less happy about is when the same credit agency points out deficiencies. But those, for the government, do not seem to be important.
Last week, one of these agencies, Moody’s, issued a report based on a study it conducted earlier this month. It kept Malta at an A2 rating, which the agency said is supported by the country’s moderate debt burden, a sound institutional framework and a reasonably diversified economy in spite of the small size.
It then spoke about the economic prospects, highlighting the probable GDP growth of 4.5% in 2024, which will slow down to 3.7% in 2025.
The stable outlook reflects Malta’s wealthy and fast-growing economy as well as solid debt affordability and moderate exposure to susceptibility to event risk which balance the economy’s small size and related high real GDP volatility, as well as high openness to international trade, the report says.
In a social media post to announce Moody’s “vote of confidence”, Prime Minister Robert Abela said Malta had been praised for its results which are “well above the euro area’s average”.
What Abela did not mention is that the same Moody’s report spoke about other matters which are less rosy for the government and for the country.
“Malta’s key credit challenges,” it said, “include a significant fiscal deficit due to a comprehensive policy response in terms of energy-related support measures and remaining concerns over the rule of law and control of corruption in the country.”
The report also speaks of “particular challenges related to control of corruption, rule of law and supervision of money laundering-related risks”.
There you go – rule of law, money laundering and corruption, sectors in which the government continues to fail miserably as it has done in the past 11 years and counting.
But the Prime Minister does not say anything about this in his social media post. Neither does he refer to these issues when he goes from village to village in the electoral campaign. Everything is perfect, according to what he says.
While the positive parts of the report should be given the attention they deserve – a solid economy which is flourishing, growing and diversifying is for everyone’s benefit – the negative comments should not be ignored.
This is what the government has unfortunately been doing for years. It played down the warnings it had been given and for a year, Malta was placed in the Financial Action Task Force grey list, the first European country to end up there. Although the country took only one year to be moved out, the risks that are being taken could lead us back where we do not want to be.
The publication of the inquiry into the hospitals’ deal and the compilation of evidence that has started this week in relation to it are exposing why foreign institutions are so concerned about how things function in Malta.